TaxTMI 
TaxTMI 
2026 (10) TMI 275
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Income-tax Act, 1961 (hereinafter referred to as 'the Act'); respectively. Case called twice. None appears at the assessee's behest. It is accordingly proceeded ex-parte. 2. We advert to the first and foremost issue between the parties regarding validity of the learned Assessing Officer's section 143(3) regular assessment dated 26.03.2025 framed in the assessee's case. It appears to have filed its return on 24.10.2023 declaring income of Rs. 6,78,68,000/- u/s 139 of the Act. And that learned departmental authorities thereafter carried out the section 132 search action dated 04.01.2024 in M/s Rollwrap Packagings Group which included the assessee as well. That being the case, the assessee vehemently submits that the learned Assessing ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of manufacturing and sale of flexible packaging material etc. It has filed its return for the impugned assessment year 2022-23 on 29.10.2022, declaring loss of Rs. 64,53,88,702/-. And the same was taken for scrutiny. The learned departmental authorities thereafter carried out section 132 search action as well as section 133A survey in its case on 21.02.2023. There is further no dispute that the learned Assessing Officer then proceeded to frame the impugned assessment on 30th March, 2024 in its case inter alia making various disallowances/additions etc., involving varying sums, which stand partly upheld in the CIT(A)'s lower appellate discussion. 3. It is in this factual backdrop that the assessee seeks to raise it's precise questio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....22 dated 15.07.2022, fulfils the supervisory requirement. The DR also submitted that Homelife Buildcon is distinguishable, as the AO therein relied on third-party search data, whereas the present case is based on assessee's own seized material. 13. We have carefully considered the rival submissions and perused the record. It is undisputed that search u/s 132 was conducted on 24.11.2022, relevant to A.Y. 2023-24. Thus, A.Y. 2022-23 is one of the three preceding years under Explanation 2(iv) to section 148. The Explanation reads that if a search is initiated, "the Assessing Officer shall be deemed to have information suggesting escapement of income for the three assessment years immediately preceding the assessment year relevant to t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ying out assessment or reassessment under section 147 read with section 148, which is the special mechanism for bringing to tax the income discovered in consequence of a search. 13.5 Although section 148 (inserted w.e.f. 01.04.2021) does not begin with a non-obstante clause similar to the erstwhile section 153A, its context and Explanation 2 make it clear that where a search is initiated, the jurisdiction thereafter must flow through this special channel, subject to prior satisfaction and approval of the Principal Commissioner or Commissioner. The legislative intent is to ensure that when a search is carried out, the assessment is framed under the specific provisions meant for such cases and not under the general provision of secti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncial year in which the return is furnished. 13.6 This position finds substantial support from the ratio of various decisions of Hon'ble High Court and Hon'ble Supreme Court. The Courts unanimously held that once a search has been conducted and proceedings are triggered under section 153A, the Assessing Officer cannot continue parallel proceedings under section 143(3) or section 147 for the same assessment year, because the entire assessment for that year stands merged in the search assessment. The Courts emphasized that the existence of a special procedure for assessment consequent to a search is a complete code in itself; therefore, ordinary assessments abate and cannot coexist with the search-based assessment. 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Act." 4. Learned CIT(DR) representing the Revenue vehemently supports the impugned assessment that the Assessing Officer had rightly finalized the same under the normal provision once the entire issue was pending before him as on the date of search. 5. We have given our thoughtful consideration to the assessee's and the Revenue's foregoing vehement submissions. We find merit in the assessee's legal ground herein once the impugned search had taken place in its case, no normal assessment under section 143(3) of the Act could have been framed in light of the tribunal's foregoing twin decisions going against the department. We thus adopt the above extracted reason mutatis mutandis to quash the impugned assessment framed by....